Is Sky's AdSmart service really a game-changer?

30 January 14, by
Arif Durrani

Will the new ad offering actually attract fresh advertisers or result in traditional brands spending less, Arif Durrani asks.

Finally, Sky’s new tailored advertising service, Ad-Smart, has arrived. First touted as a work-in-progress by the company more than five years ago, it promises to be nothing short of revolutionary for broadcasters and advertisers alike.

The ability to tailor ad breaks based on a household’s profile and location is right on-message for the growing bandwagon that considers the future of advertising to be inextricably linked to flexible, personalised content.

Available in more than one-fifth of UK households at launch, Sky believes AdSmart has the ability to not just compete with existing TV budgets but increase the size of the marketplace in general. It is hoped that smaller, regional businesses that in the past could not justify TV spend will be attracted to its targeted capabilities.

Sure enough, among the 40 brands unveiled as launch partners last week was the localised insurance group First Central and the Hampshire car dealership Hendy Group. In fact, 25 per cent of the first wave of brands to have signed up to use AdSmart are either new to TV or making a return to it after significant time away.

From a trading point of view, the challenge will be what to do with the smaller, non-attractive demographics. There have also been early grumbling from agencies about Sky’s premiums being "way too high", with multiple mark-ups for every segmentation, meaning the tailored service could easily cost more than buying the broader, untailored audience.

Alongside the advantages in attracting new brands, there is also fear that AdSmart might encourage traditional TV advertisers to switch to more targeted ads, thus reducing their overall spend. Sky clearly does not want to be responsible for an exodus of TV’s biggest spenders.

Jon Owen, the retail director at Very.co.uk, is among the existing TV marketers now trying AdSmart. He tells Campaign that it is a "major technological breakthrough" and reports "very encouraging initial commercial results". During 2014, Very.co.uk is certain to be among the brands experimenting to refine and optimise different creative routes to define audience segments with AdSmart.

YES Chris Hayward, head of investment, ZenithOptimedia

"The concept will definitely turn heads and grow. And, in the future, it will be an exciting proposition for advertisers, particularly regional ones that can now target niche groups at a fraction of the cost of standard TV ads."

YES Catherine Becker, chief executive, AdConnection

"Instead of only estimating the level of effective frequency, with AdSmart, we can serve the ad more like online – eg. four times to the right household and then no more. It should be more efficient if you get it right."The challenge from a trading point of view for Sky is currently the costing premiums are too high, with multiple mark ups for every segmentation so if you want specific age, region and mosaic group, it can end up costing clients more than buying broad audience so need careful advice and costing on this.

"Ultimately ability to have this detailed system and ability to optimise through our systems is a real game-changer. Just have to get the trading mechanism tightened up."

YES Dominic Williams, trading director, Amplifi, Aegis Media

"Viewers and advertisers love TV. You combine the power of big TV with the ability to target households in any way you want right down to the individual viewer level, and it’s obvious that this has massive potential."

MAYBE Gayle Noah, media manager, UK and Ireland, L’Oréal

"Investment by media owners in technology that allows us to target our potential consumers better, and more cost-effectively, is a welcome move. Going forward, it is something we would explore for the right brand/creative."

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